Barclays chairman defends pay structure

Marcus Agius bristles visibly when asked about the re-election of the board at
April's annual shareholder meeting.

By Josephine Moulds

3:49PM GMT 16 Mar 2009

The entire Barclays board agreed to stand for re-election to restore relations with shareholders after raising £7bn from a group of Middle Eastern investors late last year.

L&G, which owns 4.5pc of Barclays, is now seeking the support of the bank's other major shareholders to oust the chairman.

It is understood that shareholders may also use the vote to win some concessions from the bank. Agius dismisses the idea with a flash of impatience. At 62, he does not seem ready to give up the day job.

Shareholders are thought to want changes in the structure of executive pay. Agius says: "We recognise, as everybody else does, that we need to re-engineer our remuneration architecture. Not because we are embarrassed with how it was, but because that's what everybody expects."

This is likely to involve payouts over longer periods, with more of the awards in shares than in cash.

The Middle Eastern deal meant Barclays did not accept Government money, unlike Royal Bank of Scotland and Lloyds TSB. Agius says the part-nationalisation of banks may throw up some difficulties. "The Government acted decisively in October to preserve the stability of the system. It can be challenging, however, to reconcile the different pressures they find themselves under."

He is hesitant about calling the end of the financial crisis. "I think one of the defining features of the credit crunch has been just how many people who genuinely should be held to be experts have got it wrong on a serial basis. That's one of the things that has compounded the lack of confidence.

"I've never seen such a diversity of views. Some people say now is the time to buy into the market, it's not going to get any worse; and other people say we've got 10 years of a depression to look forward to. They can't both be right."

He says one tangible sign of things improving will be when retail and commercial property prices stop falling, particularly in the North American market.